ASU Scholarship Showcase

This article develops a welfare theoretic framework for interpreting evidence on the impacts of public programs on housing markets. We extend Rosen's hedonic model to explain how housing prices capitalize exogenous shocks to public goods and externalities. The model predicts that trading between heterogeneous buyers and sellers will drive a wedge between these “capitalization effects” and welfare changes. We test this hypothesis in the context of changes in measures of school quality in five metropolitan areas. Results from boundary discontinuity designs suggest that capitalization effects understate parents’ willingness to pay for public school improvements by as much as 75%.

Using a natural experiment (Regulation SHO), we show that short selling pressure and consequent stock price behavior have a causal effect on managers’ voluntary disclosure choices. Specifically, we find that managers respond to a positive exogenous shock to short selling pressure and price sensitivity to bad news by reducing the precision of bad news forecasts. This finding on management forecasts appears to be generalizable to other corporate disclosures. In particular, we find that, in response to increased short selling pressure, managers also reduce the readability (or increase the fuzziness) of bad news annual reports. Overall, our results suggest that maintaining the current level of stock prices is an important consideration in managers’ strategic disclosure decisions.

Increasing levels of financial inequality prompt questions about the relationship between income and well-being. Using a twins sample from the Survey of Midlife Development in the U. S. and controlling for personality as core self-evaluations (CSE), we found that men, but not women, had higher subjective financial well-being (SFWB) when they had higher incomes. This relationship was due to ‘unshared environmental’ factors rather than genes, suggesting that the effect of income on SFWB is driven by unique experiences among men. Further, for women and men, we found that CSE influenced income and SFWB, and that both genetic and environmental factors explained this relationship. Given the relatively small and male-specific relationship between income and SFWB, and the determination of both income and SFWB by personality, we propose that policy makers focus on malleable factors beyond merely income in order to increase SFWB, including financial education and building self-regulatory capacity.

The debate about representation in the brain and the nature of the cognitive system has been going on for decades now. This paper examines the neurophysiological evidence, primarily from single cell recordings, to get a better perspective on both the issues. After an initial review of some basic concepts, the paper reviews the data from single cell recordings – in cortical columns and of category-selective and multisensory neurons. In neuroscience, columns in the neocortex (cortical columns) are understood to be a basic functional/computational unit. The paper reviews the fundamental discoveries about the columnar organization and finds that it reveals a massively parallel search mechanism. This columnar organization could be the most extensive neurophysiological evidence for the widespread use of localist representation in the brain. The paper also reviews studies of category-selective cells. The evidence for category-selective cells reveals that localist representation is also used to encode complex abstract concepts at the highest levels of processing in the brain. A third major issue is the nature of the cognitive system in the brain and whether there is a form that is purely abstract and encoded by single cells. To provide evidence for a single-cell based purely abstract cognitive system, the paper reviews some of the findings related to multisensory cells. It appears that there is widespread usage of multisensory cells in the brain in the same areas where sensory processing takes place. Plus there is evidence for abstract modality invariant cells at higher levels of cortical processing. Overall, that reveals the existence of a purely abstract cognitive system in the brain. The paper also argues that since there is no evidence for dense distributed representation and since sparse representation is actually used to encode memories, there is actually no evidence for distributed representation in the brain. Overall, it appears that, at an abstract level, the brain is a massively parallel, distributed computing system that is symbolic. The paper also explains how grounded cognition and other theories of the brain are fully compatible with localist representation and a purely abstract cognitive system.

Background: While there is ample evidence for health risks associated with heat and other extreme weather events today, little is known about the impact of weather patterns on population health in preindustrial societies.

Objective: To investigate the impact of weather patterns on population health in Sweden before and during industrialization.

Methods: We obtained records of monthly mortality and of monthly mean temperatures and precipitation for Skellefteå parish, northern Sweden, for the period 1800-1950. The associations between monthly total mortality, as well as monthly mortality due to infectious and cardiovascular diseases, and monthly mean temperature and cumulative precipitation were modelled using a time series approach for three separate periods, 1800−1859, 1860-1909, and 1910-1950.

Results: We found higher temperatures and higher amounts of precipitation to be associated with lower mortality both in the medium term (same month and two-months lag) and in the long run (lag of six months up to a year). Similar patterns were found for mortality due to infectious and cardiovascular diseases. Furthermore, the effect of temperature and precipitation decreased over time.

Conclusions: Higher temperature and precipitation amounts were associated with reduced death counts with a lag of up to 12 months. The decreased effect over time may be due to improvements in nutritional status, decreased infant deaths, and other changes in society that occurred in the course of the demographic and epidemiological transition.

Contribution: The study contributes to a better understanding of the complex relationship between weather and mortality and, in particular, historical weather-related mortality.

Although perceptions of physically, socially, and morally stigmatized occupations – ‘dirty work’ – are socially constructed, very little attention has been paid to how the context shapes those constructions. We explore the impact of historical trends (when), macro and micro cultures (where), and demographic characteristics (who) on the social construction of dirty work. Historically, the rise of hygiene, along with economic and technological development, resulted in greater societal distancing from dirty work, while the rise of liberalism has resulted in greater social acceptance of some morally stigmatized occupations. Culturally, masculinity tends to be preferred over femininity as an ideological discourse for dirty work, unless the occupation is female-dominated; members of collectivist cultures are generally better able than members of individualist cultures to combat the collective-level threat that stigma inherently represents; and members of high power-distance cultures tend to view dirty work more negatively than members of low power-distance cultures. Demographically, marginalized work tends to devolve to marginalized socioeconomic, gender, and racioethnic categories, creating a pernicious and entrapping recursive loop between ‘dirty work’ and being labeled as ‘dirty people.’

Background: Extreme heat is a public health challenge. The scarcity of directly comparable studies on the association of heat with morbidity and mortality and the inconsistent identification of threshold temperatures for severe impacts hampers the development of comprehensive strategies aimed at reducing adverse heat-health events.

Objectives: This quantitative study was designed to link temperature with mortality and morbidity events in Maricopa County, Arizona, USA, with a focus on the summer season.
Methods: Using Poisson regression models that controlled for temporal confounders, we assessed daily temperature–health associations for a suite of mortality and morbidity events, diagnoses, and temperature metrics. Minimum risk temperatures, increasing risk temperatures, and excess risk temperatures were statistically identified to represent different “trigger points” at which heat-health intervention measures might be activated.

Results: We found significant and consistent associations of high environmental temperature with all-cause mortality, cardiovascular mortality, heat-related mortality, and mortality resulting from conditions that are consequences of heat and dehydration. Hospitalizations and emergency department visits due to heat-related conditions and conditions associated with consequences of heat and dehydration were also strongly associated with high temperatures, and there were several times more of those events than there were deaths. For each temperature metric, we observed large contrasts in trigger points (up to 22°C) across multiple health events and diagnoses.

Conclusion: Consideration of multiple health events and diagnoses together with a comprehensive approach to identifying threshold temperatures revealed large differences in trigger points for possible interventions related to heat. Providing an array of heat trigger points applicable for different end-users may improve the public health response to a problem that is projected to worsen in the coming decades.

Background: Extreme heat is a leading weather-related cause of mortality in the United States, but little guidance is available regarding how temperature variable selection impacts heat–mortality relationships.
Objectives: We examined how the strength of the relationship between daily heat-related mortality and temperature varies as a function of temperature observation time, lag, and calculation method.
Methods: Long time series of daily mortality counts and hourly temperature for seven U.S. cities with different climates were examined using a generalized additive model. The temperature effect was modeled separately for each hour of the day (with up to 3-day lags) along with different methods of calculating daily maximum, minimum, and mean temperature. We estimated the temperature effect on mortality for each variable by comparing the 99th versus 85th temperature percentiles, as determined from the annual time series.

Results: In three northern cities (Boston, MA; Philadelphia, PA; and Seattle, WA) that appeared to have the greatest sensitivity to heat, hourly estimates were consistent with a diurnal pattern in the heat-mortality response, with strongest associations for afternoon or maximum temperature at lag 0 (day of death) or afternoon and evening of lag 1 (day before death). In warmer, southern cities, stronger associations were found with morning temperatures, but overall the relationships were weaker. The strongest temperature–mortality relationships were associated with maximum temperature, although mean temperature results were comparable.

Conclusions: There were systematic and substantial differences in the association between temperature and mortality based on the time and type of temperature observation. Because the strongest hourly temperature–mortality relationships were not always found at times typically associated with daily maximum temperatures, temperature variables should be selected independently for each study location. In general, heat-mortality was more closely coupled to afternoon and maximum temperatures in most cities we examined, particularly those typically prone to heat-related mortality.

Theory suggests that human behavior has implications for disease spread. We examine the hypothesis that individuals engage in voluntary defensive behavior during an epidemic. We estimate the number of passengers missing previously purchased flights as a function of concern for swine flu or A/H1N1 influenza using 1.7 million detailed flight records, Google Trends, and the World Health Organization's FluNet data. We estimate that concern over “swine flu,” as measured by Google Trends, accounted for 0.34% of missed flights during the epidemic. The Google Trends data correlates strongly with media attention, but poorly (at times negatively) with reported cases in FluNet. Passengers show no response to reported cases. Passengers skipping their purchased trips forwent at least $50 M in travel related benefits. Responding to actual cases would have cut this estimate in half. Thus, people appear to respond to an epidemic by voluntarily engaging in self-protection behavior, but this behavior may not be responsive to objective measures of risk. Clearer risk communication could substantially reduce epidemic costs. People undertaking costly risk reduction behavior, for example, forgoing nonrefundable flights, suggests they may also make less costly behavior adjustments to avoid infection. Accounting for defensive behaviors may be important for forecasting epidemics, but linking behavior with epidemics likely requires consideration of risk communication.

This paper studies an infinite-horizon repeated moral hazard problem where a single principal employs several agents. We assume that the principal cannot observe the agents' effort choices; however, agents can observe each other and can be contractually required to make observation reports to the principal. Observation reports, if truthful, can serve as a monitoring instrument to discipline the agents. However, reports are cheap talk so that it is also possible for agents to collude, i.e., where they shirk, earn rents, and report otherwise to the principal. The main result of the paper constructs a class of collusion-proof contracts with two properties. First, equilibrium payoffs to both the principal and the agents approach their first-best benchmarks as the discount factor tends to unity. These payoff bounds apply to all subgame perfect equilibria in the game induced by the contract. Second, while equilibria themselves depend on the discount factor, the contract that induces these equilibria is independent of the discount factor.